Completion at Haddenham
We are pleased to report that we have recently completed the sale of all 20 industrial units in Haddenham, Buckinghamshire.
All sale prices achieved exceeded those in the original budget for the development.
This, combined with costs remaining on budget and the build program being adhered to, resulted in the partnership achieving an IRR for investors that was well above our 5% target at 14.7%.
Overcoming obstacles
In October 2018, we entered into a joint-venture partnership with Tavis House Properties (THP) to develop the site approximately 30 minutes from Oxford.
A key consideration prior to acquisition was the site’s excellent transport links. The site is situated in close proximity to the M40 corridor. A building contract was agreed at a competitive price. However, delays were caused when waiting for planning authorisation from the council. As a result, works for this project started four months behind schedule.
Having started construction in February 2020, we completed the project in February 2021. Given the numerous government lockdowns and restrictions imposed by the government during the build term, to complete construction within 12 months constituted a real success.
These events reinforced our belief that working alongside JV partners that have the expert knowledge, experience, and sophisticated systems to remain resilient in difficult periods is the right strategy when managing investments on behalf of our investors.
Following practical completion, excellent sales progress was made throughout 2021, with the final units sold in December 2021.
Finding the perfect niche
Thanks to a diverse occupier base and demand far outstripping supply, small-scale industrial and warehouse units offer investors the ideal combination of resilience, risk protection and steady return.
Small and medium-size enterprises (SMEs) units may not attract much attention from architectural awards bodies. However, they do present a vast, vibrant and largely underserved market. SMEs account for three fifths of the employment and around half of turnover in the UK private sector.
With all of our property investments, the foundations for financial security are the fact that we own the land upon which these properties are developed.
Further safeguards come from the fact that we do not just invest in property. We diversify our portfolio across a range of business activities, which include hotels, golf clubs and forests.
All contracts are subject to extensive due diligence and exacting terms. During development, both our investment team and independent surveyors carry out regular on-site evaluations to check on progress and costs.
These factors combine to create a perfect fit for our investment portfolio and our clients. Our commercial property developments are supremely marketable and deliver good returns at low risk. They also offer the valuable economic dividend of helping to boost opportunities and growth for UK SMEs.
If you would like to discuss any of the issues raised in this article, please get in touch with one of our team today on 020 3195 3500 or contact enquiries@stellar-am.com.
Written by Jack Dobinson
Important Information
Stellar Asset Management Limited does not offer investment or tax advice or make recommendations regarding investments. Prospective investors should ensure that they read the brochure and fully understand the risk factors before making any investment decision. The value of investments and the income from them may fall as well as rise and is not guaranteed. No assurance or guarantee is given that any targeted returns will be achieved. Forecasts of potential future results are not a reliable indicator of actual future results.
Stellar Asset Management Limited
20 Chapel Street
Liverpool
L3 9AG
is authorised and regulated by the Financial Conduct Authority.
